The Qs continue to show strength while the rest of the market wallows in worry and is in fact up .07 after hours on solid volume. That's probably due to at least 2 factors:
1) The Qs have no financial (except net banking), home building or retail merchandising exposure.
2) Microsoft has been on a run up the past two days (Halo 3 and ????)
While supporting the NASDAQ, MSFT's 75M share .48 gain also helped the ailing DOW stay above the zero line. Other than BA, HPQ, HON and UTX the DOW was not showing much enthusiasm today.
Although the Qs are now solidly overbought, that doesn't mean they are going down any time soon. Just look at the July chart reading. We haven't even touched the upper band yet and from a strictly risk management point of view, what are the options for the mutual funds that have to be fully invested and the hedge funds who don't want to be short because of the impending (maybe) Fall market surge. The Beta is with the NAZ and the Qs are the ETF of choice. Expect volume to pick up in the coming weeks as the field gets crowded.
The VIX had a 9% range and flashed a solid red bar into the close. This may be the precursor for the reversal as the VIX is solidly oversold. When we do get the turn I expect the IWM and SPY to give up the most ground and the Qs the least.
The portfolio remain 80% net long and I'm still on hold for Thursday before initiating any new positions.